Saudi Arabia's 2025 Economic Outlook: What Investors Need to Know

New Investment Law 2025: What’s Changed and Why It Matters

Doing business in the KSA has become much simpler, which is great news for foreign investors.

Until recently, getting started meant going through a long and often complicated licensing process. It was time-consuming, full of paperwork, and difficult to navigate.

Now, that’s changed.

Under the new 2025 Investment Law, Saudi Arabia has introduced a national registry that replaces licensing with a faster, more straightforward registration system. It is designed to reduce red tape, speed up approvals, and make market entry smoother for international businesses.

These updates reflect the Kingdom’s push under Vision 2030 to welcome more foreign direct investment (FDI) and build a modern, competitive economy.

What’s Better Now:

• No more licensing delays
• Foreign and local investors now enjoy equal rights
• Most sectors are open, unless on the restricted list
• You can freely repatriate your profits and assets

Gatestone Group simplifies the entire journey, helping you establish your business in Saudi Arabia with speed, clarity, and full regulatory alignment. With the right guidance, stepping into this fast-growing market can be a confident and rewarding decision.

Understanding Saudi Arabia’s Tax System for Foreign Investors

Before doing business in Saudi Arabia, one must understand the tax system. The country offers a tax environment structured to attract foreign capital, but it’s not quite the same as what you might be used to. Here’s how it breaks down.

Corporate Tax or Zakat?

• Corporate tax in Saudi Arabia (20%) applies to foreign investors or the non-GCC ownership share in a business.
• Zakat (2.5%) is a religious levy that applies to Saudi or GCC-owned companies based on equity and retained earnings.

If your business is partially foreign-owned, you’ll likely pay both, depending on ownership percentages.

Withholding Tax

Any payments to non-residents, like service providers, consultants, or licensors, are subject to withholding tax (WHT):

• Dividends & interest: 5%
• Royalties: 15%
• Management fees: 20%

Saudi Arabia has many double taxation treaties (DTAs), which, if they are structured properly, can significantly lower these rates.

VAT and Fatoora Compliance

Saudi Arabia’s 15% VAT applies to most business activities. Some sectors, such as exports and education, qualify for exemptions.

All businesses must issue e-invoices using Fatoora, the government’s digital invoicing platform managed by ZATCA. It’s now mandatory, and non-compliance results in penalties.

We help clients reduce their tax burden by using double tax treaties, SEZ-based incentives, and RHQ registration strategies. With our guidance, companies can optimise their tax exposure and qualify for long-term exemptions and savings under Saudi Arabia’s modern investment framework.

High-Growth Sectors for Global Investors in Saudi Arabia

Saudi Arabia’s economic transformation is actively reshaping key industries, and as a foreign investor, understanding where the capital flows is essential. These sectors offer real momentum, clear incentives, and strong alignment with Vision 2030 goals.

Smart Infrastructure & NEOM

NEOM is more than a mega-project; it’s a model city built on green energy, tech, and sustainability. With large-scale infrastructure contracts, foreign direct investment (FDI) incentives, and long-term return potential, it’s a unique opportunity for construction, engineering, and smart mobility firms. It’s the kind of project that could anchor your presence for decades.

Green Energy

With over 50% of energy to come from renewables by 2030, Saudi Arabia is aggressively pursuing solar, wind, and green hydrogen initiatives. If you’re in clean tech, storage, or grid systems, this market offers regulatory incentives and an early-mover advantage. It’s a play for the future, but the contracts are being written now.

Health and Biomedical Sectors

The healthcare sector is undergoing reform to welcome global capital inflow, digital innovation, and advanced clinical models. With growing demand, tax relief, and a push for biotech, this is an open runway for medtech providers and hospital groups. The Kingdom wants world-class healthcare, and they’re inviting partners.

Fintech & AI

Digital innovation is a top government priority. With sandbox environments, zero corporate tax in SEZs, and rapid licensing, fintechs, AI platforms, and cyber solutions are finding traction.

Tourism & Entertainment

Between Expo 2030 and the FIFA World Cup, billions will be funnelled into hotels, theme parks, and digital platforms. Public-private partnerships are rising, and demand for international expertise is growing.

Why Having the Right Local Partner Makes All the Difference

Expanding into Saudi Arabia offers many opportunities, but understanding local processes is key. Government authorities like MISA, ZATCA, and CMA each have their own requirements, which can be difficult to manage without the right guidance.

Local Expertise Saves Time and Reduces Risk

From choosing the right entity structure (LLC, JSC, or JV) to registering under the updated Investment Law, even small mistakes can lead to delays. You’ll also need to comply with systems like Fatoora (e-invoicing), meet Saudisation targets, and understand how RHQ and SEZ incentives apply to your business.

How Gatestone Group Supports You

Gatestone Group acts as your trusted local advisor on the ground. We work alongside you to:

• Plan your entry with full market and legal insight
• Register your business quickly and correctly
• Qualify for tax incentives like reduced zakat, VAT, and withholding tax
• Meet compliance standards from setup to operations
• Structure deals in line with Saudi regulations

We provide end-to-end support from early-stage feasibility to long-term regulatory compliance. With Gatestone, you gain local clarity, avoid costly errors, and stay focused on growth. Contact us for further assistance or guidance regarding company formation in Saudi Arabia.